==========================================START OF PAGE 1======
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 15357 / May 1, 1997
SEC v. Marshall E. Melton; Asset Management and Research, Inc.;
Westview Capital, L.C.; Trading Partners, L.C.; and Trading
Partners II, L.C. (M.D.N.C., Civil Action No. 2:97-CV-00151)
The Securities and Exchange Commission announced today that
on April 30, 1997, the Honorable William L. Osteen, Sr., United
States District Judge for the Middle District of North Carolina,
entered an order of preliminary injunction and other relief as to
defendant Marshall E. Melton ("Melton"). The order enjoins and
restrains Melton from violating Section 17(a) of the Securities
Act of 1933, Section 10(b) of the Securities Exchange Act of 1934
and Rule 10b-5 thereunder, and Section 206 of the Investment
Advisors Act of 1940. The court also ordered a freeze of all
assets held by Melton.
On April 21, 1997, while disposition of the Commission's
motion for injunctive relief as to Melton was pending before the
court, eight true bills of indictment were returned against
Melton in Guilford County, North Carolina. The indictments
alleged criminal violations of the North Carolina securities laws
by Melton in conjunction with the defendant companies and with
other companies in which Melton has interests. The Commission
requested an emergency hearing on its pending motion after the
indictments were issued because of the possibility of a
dissipation of assets by Melton. The Court granted the
Commission's requested relief as described above shortly after
the hearing.
In its complaint dated February 24, 1997, the Commission
alleged that violations of the antifraud provisions of the
securities laws by Melton and the defendant companies had
occurred primarily between mid-1994 and late 1996. During that
time, defendants Westview Capital, TP and TP2 raised
approximately $5,000,000 from 44 investors, many of whom had
invested in more than one of the entities. Through
misrepresentations and omissions of material facts, Melton
solicited and raised funds from unwitting investors. Among other
violations, the investors were advised that their funds were
being invested in specific investments when, in fact, Melton was
commingling monies among the limited liability companies and
using investors' funds to operate other entities he controlled.
See also: L.R. 15267 (February 27, 1997) and L.R.
15319 (April 8, 1997)